Statement: Opposition to Substitute House Bill 6

as unveiled June 26 in the Ohio State Senate Energy and Public Utilities Committee

The following statement can be attributed to Tim Donovan, Founder and Chief Executive Officer at Donovan Energy.

“Here at Donovan Energy, we try to keep our heads out of politics and stay focused on our mission: helping our customers save money on energy. However, when a piece of proposed legislation threatens to harm our current and future customers, and their ability to manage their energy costs and remain competitive, we feel an obligation to let them know.

Substitute House Bill 6 is a complicated, far-reaching bill that would replace House Bill 6, which was passed by the Ohio House last month on a 53-43 vote.”

Below is our synopsis of key points of the new Substitute HB6.

Nuclear bailouts

Donovan Energy does not support but also does not oppose, the provisions of the bill that seek to shore up the operations of two nuclear plants in northern Ohio. Reasonable people can differ on the wisdom of charging customers extra money to support nuclear generation, and there is little question that if these plants ceased operating, carbon emissions in Ohio would increase (in the short term, anyway). That said, we are troubled by the fundamental unfairness of charging customers throughout Ohio for plants that most Ohioans don’t benefit from. We are also troubled by the lack of transparency regarding whether these plants even need financial assistance. Our Ohio customers should know that if Sub HB6 passes, they may be assessed up to an extra $1.50 for each MWh that they use, regardless of whether or not they shop with a competitive retail electric supplier.

Renewable energy

Substitute House Bill 6 would weaken Ohio’s Renewable Energy Standard, both by lowering the overall standard (from 12.5% to 8.5%) and by removing Ohio’s industrial load from the baseline against which the standard is measured. Passage would harm Donovan Energy’s customers who have installed solar and who seek to install solar in the future, by a) weakening the SREC market, which provides modest but important cashflows for solar projects; and b) by signaling that Ohio doesn’t support renewable energy, which will slow the maturation and competitiveness of our solar installation market. Since passage of the Renewable Energy Standard in 2008, the General Assembly has repeatedly tinkered with it, causing havoc and uncertainty. The Senate should strip these measures from the bill and give the market a chance to work.

Energy efficiency

Instead of repealing Ohio’s energy efficiency standards altogether, as the original House Bill 6 proposed, Substitute HB6 makes a number of far-reaching and complex changes to the standards that will require days, if not weeks, of diligent study to fully understand. If the Committee is committed to voting on a bill yet this week, it should remove these sections entirely; it is both unwise and unfair to introduce such complicated, sweeping changes to the energy efficiency sector without giving industry stakeholders time to understand, digest, and form opinions on them. That said, Donovan Energy opposes the most obvious changes to the standard, including the removal of utility shared savings incentives, which allow utilities to invest in bigger, better energy efficiency programs.

Coal bailouts

Donovan Energy strongly opposes the portions of the bill that allow the Public Utilities Commission of Ohio to sanction customer bailouts of two coal plants, one of which is not even in Ohio. In this respect, the Substitute bill represents a modest improvement over the original, in that the PUCO would not be required to bail out these coal plants with customer money. Still, these provisions represent an unwelcome intrusion of the Ohio General Assembly to support two of the oldest, least efficient, most polluting power plants in the country by giving them millions of customer dollars they don’t deserve. These provisions should be rejected entirely.

About Donovan Energy

Based in Cincinnati, Donovan Energy is an energy project development company that approaches energy in new ways to help our customers reduce energy use and save money. As stewards at the forefront of clean energy technology, we offer solutions that decrease energy costs (procurement), finance energy projects (PACE finance), reduce energy use (LED Lighting, HVAC and Building Envelope solutions) and produce renewable energy. Our team of industry veterans powers energy savings for commercial and industrial customers, spanning education, commercial real estate, healthcare, municipal, manufacturing, nonprofit and parking.